Question 1

Harvey's, a large and successful retail chain on the West Coast, decides to expand its operations across the U.S. Which of the following organizational structures should Harvey's use?

Accepted Answer

A)   basic
B)   simple
C)   multidivisional
D)   functionalE) B) and C)
F) C) and D)

Question 2

A firm that uses a structure that is organized along different business functions such as HR, R&D, Sales, and Marketing and also along different geographical areas such as different countries of the world is most likely using a ________ structure.

Accepted Answer

A)   global matrix
B)   multidivisional
C)   functional
D)   simpleE) B) and C)
F) None of the above

Question 3

Which of the following global strategies best matches with a multidivisional structure?

Accepted Answer

A)   international
B)   multidomestic
C)   global-standardization
D)   transnationalE) All of the above
F) A) and B)

Question 4

Ruby, a recent fashion design school graduate, has received praise for her clothing designs from her peers and friends on social networking sites; this has inspired her to set up a store where she can design and sell apparel. After experiencing some success with sales, she recruits two employees to handle customers at the store. However, she handles other day-to-day affairs herself, while continuing to design clothes. Which of the following is likely to be a pitfall of this organizational structure established by Ruby?

Accepted Answer

A)   Once the firm starts growing and attracting more customers she is likely to feel overloaded.
B)   Hiring more employees will result in loss of intellectual property.
C)   People are highly unlikely to buy clothes from a store run by a fashion design student.
D)   The online admiration of her designs will not translate into sales.E) B) and C)
F) C) and D)

Question 5

An open innovation model reduces a firm's absorptive capacity.

Accepted Answer

A) True 
 B)False

Question 6

Why is the optimal organizational structure a multidivisional structure?

Accepted Answer

A)   Its focus is on driving down costs.
B)   Its focus is on producing differentiated products.
C)   Its focus is on retaining activities within a single geographic area.
D)   Its focus is on establishing a flat hierarchy operated in a decentralized fashion.E) A) and B)
F) None of the above

Question 7

A company that is using extrinsic motivation as an output control mechanism will most likely

Accepted Answer

A)   organize training sessions for employees.
B)   cut budgets during recessions.
C)   implement a peer review system.
D)   threaten to lay off employees if they do not achieve targets.E) B) and C)
F) All of the above

Question 8

What most likely happens when a firm optimizes its organizational structure to its current situation?

Accepted Answer

A)   It plants the seed of subsequent failure: the tightly coupled system can break apart when internal or external pressures occur.
B)   It achieves superior performance.
C)   It makes it difficult for managers to make the necessary changes due to its effects on resource allocation and power distribution.
D)   It transforms strategy into actions and business models.E) A) and B)
F) A) and C)

Question 9

Uptown Office Systems recently underwent a reorganization. Based on customer feedback, the company eliminated many of its middle management positions and implemented a flatter structure. Which of the following is a possible drawback of this decision?

Accepted Answer

A)   Employees will have less power and autonomy, resulting in a loss of morale.
B)   Internal communications and decision-making processes will be slower.
C)   The increased span of control for remaining managers may lead to higher levels of stress and possible burnout.
D)   Employees will be forced to take on more specialized roles and may become bored by repetitive tasks.E) A) and C)
F) C) and D)

Question 10

Contrast closed and open innovation.

Accepted Answer

In the closed innovation model, the firm...

Question 11

Fine Lines Inc. is a notebook manufacturing company based in Ohio. Fine Lines' main market is Ohio. It aims at providing its products at better prices than its competitors. Which of the following structures is Fine Lines Inc. likely to use if it has functional setup?

Accepted Answer

A)   organic
B)   simple
C)   matrix
D)   mechanisticE) B) and C)
F) A) and D)

Question 12

What is organizational culture? What are the key elements of organizational culture?

Accepted Answer

Organizational culture describes the col...

Question 13

Why does strategy implementation often require changes within an organization?

Accepted Answer

A)   Strategy implementation is less important than strategy formulation.
B)   Strategy implementation transforms strategy into actions and business models.
C)   Strategy always follows structure.
D)   Strategy implementation does not affect resource allocation and power distribution within an organization.E) A) and C)
F) A) and B)

Question 14

Which of the following is an unintended side effect of a high degree of specialization in an organization?

Accepted Answer

A)   decreased trade-off between breadth and depth of knowledge
B)   decreased opportunities for the division of labor
C)   reduced employee satisfaction due to repetition of tasks
D)   reduced productivityE) A) and B)
F) A) and C)

Question 15

One of Waterfall Apparel's core values is to provide unbeatable customer service, a commitment introduced to the company by its founder more than 10 years ago. This value is expressed in the company's "True to You" campaign, which promises a no-questions-asked returns policy and an offer to stitch the customer's initials onto any item for free using a patented sewing technique, two features that are not offered by any of Waterfall's competitors. Although the campaign has resulted in a 10 percent decline in profits, Waterfall has decided to continue to pursue its founder's vision to reward customers and maintain employees' sense of purpose. Why does Waterfall's culture, exemplified by the "True to You" campaign, fail to support a competitive advantage?

Accepted Answer

A)   It does not increase economic value creation for the firm.
B)   It is not a rare resource.
C)   Waterfall lacks founder imprinting.
D)   The culture is not difficult to imitate.E) A) and B)
F) B) and D)

Question 16

Which of the following real-world scenarios best exemplifies the use of organizational culture to build competitive advantage?

Accepted Answer

A)   W. L. Gore & Associates organizes its employees into project-based teams.
B)   Apple develops high-tech products that are preferred by consumers across the world.
C)   Southwest Airlines pilots sometimes help load baggage, which results in quick turnaround time.
D)   GM offers compensation if its products do not meet a consumer's expectations.E) A) and B)
F) A) and C)

Question 17

Which of the following provides an example of a common drawback of a functional strategy?

Accepted Answer

A)   Bert had a difficult time communicating efficiently with the manager of another department.
B)   Marietta was surprised about the inflexibility of her firm when it rejected her marketing plan.
C)   Juan's manager dismissed his idea because it was too innovative.
D)   Mary did not accept the position with the firm because it has an ineffective cost-leadership strategy.E) All of the above
F) None of the above

Question 18

Why are controls like budgets and operating procedures that McDonald's implements known as input controls?

Accepted Answer

A)   They are independent of an organization's culture.
B)   They are implemented by corporate headquarters.
C)   They are considered before employees make any decisions.
D)   They are ad hoc and not codified.E) A) and D)
F) A) and C)

Question 19

Which of the following is true of the process of organizing for competitive advantage?

Accepted Answer

A)   To maintain competitive advantage, companies need to restructure as they grow and the competitive environment changes.
B)   Strategy formulation and strategy implementation are independent activities.
C)   Organizing for competitive advantage is a static and not a dynamic process.
D)   Formulating an effective strategy is a necessary and sufficient condition for gaining and sustaining competitive advantage.E) B) and D)
F) B) and C)

Question 20

Island Home Goods pursues a related diversification strategy, deriving less than 70 percent of revenues from its original business unit, Island Furniture, and maintaining several related units including Island Lighting and Island Hardware. Which of the following structures is most likely to support this strategy?

Accepted Answer

A)   M-Form with centralized decision-making power (cooperative multidivisional) 
B)   M-Form with decentralized decision-making power (competitive multidivisional) 
C)   functional with centralized decision-making power
D)   functional with decentralized decision-making powerE) A) and B)
F) A) and C)

Exam 11: Organizational Design: Structure, Culture, and Control

What is organizational culture? What are the key elements of organizational culture?

Correct Answer
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Organizational culture describes the col...
View Answer

Contrast closed and open innovation.

Correct Answer
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In the closed innovation model, the firm...
View Answer

An open innovation model reduces a firm's absorptive capacity.

Correct Answer
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Which of the following global strategies best matches with a multidivisional structure?

Correct Answer
verified

Which of the following provides an example of a common drawback of a functional strategy?

Correct Answer
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Which of the following is an unintended side effect of a high degree of specialization in an organization?

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Which of the following is true of the process of organizing for competitive advantage?

Correct Answer
verified

Correct Answer
verified

Why is the optimal organizational structure a multidivisional structure?

Correct Answer
verified

A company that is using extrinsic motivation as an output control mechanism will most likely

Correct Answer
verified

Fine Lines Inc. is a notebook manufacturing company based in Ohio. Fine Lines' main market is Ohio. It aims at providing its products at better prices than its competitors. Which of the following structures is Fine Lines Inc. likely to use if it has functional setup?

Correct Answer
verified

Which of the following real-world scenarios best exemplifies the use of organizational culture to build competitive advantage?

Correct Answer
verified

Why are controls like budgets and operating procedures that McDonald's implements known as input controls?

Correct Answer
verified

Harvey's, a large and successful retail chain on the West Coast, decides to expand its operations across the U.S. Which of the following organizational structures should Harvey's use?

Correct Answer
verified

Uptown Office Systems recently underwent a reorganization. Based on customer feedback, the company eliminated many of its middle management positions and implemented a flatter structure. Which of the following is a possible drawback of this decision?

Correct Answer
verified

Why does strategy implementation often require changes within an organization?

Correct Answer
verified

What most likely happens when a firm optimizes its organizational structure to its current situation?

Correct Answer
verified

A firm that uses a structure that is organized along different business functions such as HR, R&D, Sales, and Marketing and also along different geographical areas such as different countries of the world is most likely using a ________ structure.

Correct Answer
verified

Exam 11: Organizational Design: Structure, Culture, and Control

What is organizational culture? What are the key elements of organizational culture?

Correct AnswerverifiedOrganizational culture describes the col...View AnswerShow Answer

Contrast closed and open innovation.

Correct AnswerverifiedIn the closed innovation model, the firm...View AnswerShow Answer

An open innovation model reduces a firm's absorptive capacity.

Correct AnswerverifiedShow Answer

Which of the following global strategies best matches with a multidivisional structure?

Correct AnswerverifiedShow Answer

Which of the following provides an example of a common drawback of a functional strategy?

Correct AnswerverifiedShow Answer

Which of the following is an unintended side effect of a high degree of specialization in an organization?

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Which of the following is true of the process of organizing for competitive advantage?

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Why is the optimal organizational structure a multidivisional structure?

Correct AnswerverifiedShow Answer

A company that is using extrinsic motivation as an output control mechanism will most likely

Correct AnswerverifiedShow Answer

Fine Lines Inc. is a notebook manufacturing company based in Ohio. Fine Lines' main market is Ohio. It aims at providing its products at better prices than its competitors. Which of the following structures is Fine Lines Inc. likely to use if it has functional setup?

Correct AnswerverifiedShow Answer

Which of the following real-world scenarios best exemplifies the use of organizational culture to build competitive advantage?

Correct AnswerverifiedShow Answer

Why are controls like budgets and operating procedures that McDonald's implements known as input controls?

Correct AnswerverifiedShow Answer

Harvey's, a large and successful retail chain on the West Coast, decides to expand its operations across the U.S. Which of the following organizational structures should Harvey's use?

Correct AnswerverifiedShow Answer

Uptown Office Systems recently underwent a reorganization. Based on customer feedback, the company eliminated many of its middle management positions and implemented a flatter structure. Which of the following is a possible drawback of this decision?

Correct AnswerverifiedShow Answer

Why does strategy implementation often require changes within an organization?

Correct AnswerverifiedShow Answer

What most likely happens when a firm optimizes its organizational structure to its current situation?

Correct AnswerverifiedShow Answer

A firm that uses a structure that is organized along different business functions such as HR, R&D, Sales, and Marketing and also along different geographical areas such as different countries of the world is most likely using a ________ structure.

Correct AnswerverifiedShow Answer

Correct Answer
verified
Organizational culture describes the col...
View Answer

Correct Answer
verified
In the closed innovation model, the firm...
View Answer

Correct Answer
verified

Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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